Economics books have been printed in volume since The Wealth of Nations by Adam Smith was published in 1776. Originally known by its longer title; An Inquiry into the Nature and Causes of the Wealth of Nations, this became a book that was read outside of academic circles; middle-class merchants and bankers also investigated the title.
Owning the keys to financial success
The broad appeal of economics books perhaps lies in their explicit attempts to explain how the financial world works.
The financial markets, labour markets and systems of government combined to produce an almost bewildering ecosystem of economic forces.
Economists offer an attractive solution. ‘Come and understand the laws of economics which control these forces’, they imply; ‘and you will be able to understand the present and even predict the future.’
In the financial world, the ability to analyse and the forecast is a valuable skill. With even an ounce of foresight, investors are able to generate attractive returns by allocating their capital to projects that will prosper.
Economics books offer the key to financial success by allowing members of the public to see the ‘inside’ of the financial world.
Understanding rational behaviour
Microeconomic books explain the decisions by economic participants, be they firms or individuals. It offers several models which explain when and why a firm may choose to increase or decrease production. Why it may raise or lower prices. Why it may enter or exit a marketplace.
We cannot pretend that firms and people consistently act in a rational fashion. But nevertheless, the rational choice will be the average choice. Therefore, understanding the rational response by others to changes in economic conditions is considered as foundational business knowledge.
Macroeconomic books look at large scale economic actors and environments, such as nations, governments, stock markets and global trade partners. Again, economics offers an insight to why these behave in the way they do.
Why do currencies fluctuate in value? Why do governments increase or decrease their spending on infrastructure projects? What causes a stock market boom? These are all answers offered by macroeconomic theory.
Economics is a classic subject pursued by leaders
Although it has been referred to as the ‘dismal science’ by some, Economics remains a prestigious subject.
Oxford University offers a bachelor’s degree known as ‘PPE’, which stands for Politics, Philosophy and Economics. It remains an attractive qualification taken by budding politicians. The implication is that mastery of all three subjects is a useful grounding for the professional political career path. This is perhaps in recognition of the huge role that money plays in politics (both in terms of getting elected and managing an economy).
Reporting by the Guardian in 2015 displayed how dominant this single educational course was in political circles with this commentary; “Monday, 13 April 2015 was a typical day in modern British politics. An Oxford University graduate in philosophy, politics and economics (PPE), Ed Miliband, launched the Labour party’s general election manifesto. It was examined by the BBC’s political editor, Oxford PPE graduate Nick Robinson, by the BBC’s economics editor, Oxford PPE graduate Robert Peston, and by the director of the Institute for Fiscal Studies, Oxford PPE graduate Paul Johnson. It was criticised by the prime minister, Oxford PPE graduate David Cameron. It was defended by the Labour shadow chancellor, Oxford PPE graduate Ed Balls.”
So long as economics is seen as an ‘essential’ background subject for aspirational future leaders, economics books will continue to see strong demand. Whether they are being bought by the student themselves, or their hopeful parents.
Economics informs competent financial planning
The final reason I will offer for why economics books continue to sell well is that the personal finance genre as a whole is booming right now.
Skyrocketing home prices, together with slowing income growth and increased competition between graduates is leading to an erosion in the economic power of the young, educated middle class. Desperate to maintain their grip on a financially successful future, adults are turning to self-help books and other financial material to improve the performance of their savings and investments.
It’s natural for a well-read financial planner to pick up an economics book while they browse the personal finance bookshelf. Economics books are therefore benefiting from a generational focus on money and finance.